A movement upward and to the left along the money demand curve is caused by:
A)an increase in the interest rate.
B)a decrease in the interest rate.
C)a decrease in real GDP.
D)an increase in real GDP.
E)an increase in the average price level.

Question

Quizplus · Accepted Answer

An increase in the interest rate causes the opportunity cost of holding money to increase, which results in a movement upward and to the left along the money demand curve.

A Movement Upward and to the Left Along the Money